UK: What Is The UK's Decision To Leave The EU Likely To Mean For The UK Audio-visual Sector?

Overview

As a result of the Referendum, we must now focus on the
direction of travel with the UK leaving the EU. It is not
clear what that direction of travel will be, but it is likely
(after a period of time) to involve a new trading relationship
between the UK and the EU (perhaps along the lines of existing EU
relationships with non-EU countries, or perhaps sui generis).
We think it unlikely that the end result will be a "clean
break" with no ongoing relationship with the EU other than
under general international trade agreements.

Absent a "clean break", our view is that any new
trading arrangement agreed with the EU is likely to involve some
requirement that EU standards/regulations are adhered to where they
are relevant to trade between the UK and the EU.

The UK will remain a member of the EU for some time to come,
until the arrangements for its departure are concluded, but there
can be no doubt that its ability to influence EU initiatives will
be heavily diminished.

Copyright

We believe that the EU is likely to press ahead with its
proposed comprehensive review of copyright. Whilst the UK
will have reduced influence (as a current but departing member) and
then no influence (as a non-member, except to the extent it has
influence under any new trading arrangement) in this process, we
believe that any new trading arrangement agreed with the EU is
likely to involve a requirement that UK copyright law be compliant
in at least some regards. Furthermore, even as a non-member,
the UK may regard it as sensible to align its position (e.g. in
relation to copyright exceptions) to a harmonised EU copyright
regime. Leaving any EU trading arrangement aside, the UK will
continue to be bound by its international obligations as a member
of WIPO and as a signatory to the Berne Convention.

Audio-visual media services

The EU has announced various measures following a review of the
Audiovisual Media Services Directive. The principle of
"country of origin" (where a service is regulated in the
EU state where it originates and then is available unrestricted in
any other EU member state) has broadly been retained, but with some
additional protections for the "country of destination"
(i.e. the EU State(s) that the service is targeting); particularly
augmented "take down" grounds and financial levies for
some services. The devil of some of these measures will be in
the detail; the UK will have reduced influence (as a current but
departing member) and then no influence (as a non-member, except to
the extent it has influence under any new trading arrangement) in
the process of refining these measures. Furthermore,
audiovisual service providers based in the UK but providing
services to audiences in continuing member states will need to
monitor closely the potential impact of these changes and their
impact on services whose UK broadcast hub will ultimately be
outside the EU.

European nationality

The EU rules as set out in the Audiovisual Media Services
Directive require EU service providers to comply with quotas for
European programming. As a departing member, it does
not follow that in the future UK originated content would so
qualify and so, unless any new trading arrangement agreed with the
EU preserves this qualification, UK content may not contribute to
the quota and might, therefore, lose value in the European
market.

State Aid: UK support for creative industries

The EU has historically restricted, through its State Aid rules,
the level at which the UK (and other member states) can provide
subsidised support (eg through tax credits) for the audiovisual
sector. Whilst in theory, the UK would be freed from these
restrictions, we do not expect this to change as we believe that,
in practice, any new trading arrangement agreed with the EU is
likely to involve a requirement that UK be compliant with EU State
Aid parameters.

European support for creative industries

Whilst any new trade arrangement may allow the UK audiovisual
sector some continuing access to EU-wide support for the creative
industries, there must be a danger that the degree of access will
be diminished or lost as part of the exit process.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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